BUSINESS

The employees of Donnelly Music Company earn total wages of $4690 during January.  The total amount is taxable under FICA, FUTA and SUTA.  The state contribution rate for the company is 3.6%.  The amount withheld for federal income taxes is $685.  Journalize the payment of the monthly wages, and record the payroll taxes.

 

 

 

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6–4A.          Wages…………………………………………………………………..

 

FICA Taxes Payable—OASDI…………………………

 

FICA Taxes Payable—HI………………………………..

 

Employees FIT Payable…………………………………..

 

Cash……………………………………………………………….

 

 

 

Payroll Taxes………………………………………………………..

 

FICA Taxes Payable—OASDI…………………………

 

FICA Taxes Payable—HI………………………………..

 

FUTA Taxes Payable………………………………………

 

SUTA Taxes Payable………………………………………

 

 

 

Vulcra Inc. has semi monthly payroll of $67,000 on September 12.  The total payroll is taxable under FICA Taxes – HI; $63,850 is taxable under FICA.  Taxes – OASDI and $10,300 is taxable under FUTA and SUTA.  The state contributions rate for the company is 4.1%.  The amount withheld for federal income taxes is $9,911.  The amount withheld for state income taxes is $1,410.

 

 

 

  1.  Journalize the payment of the wages and record the payroll taxes on September 12.

    DR             CR

 

 

 

6–5A.  (a)   Wages…………………………………………………………………..

 

FICA Taxes Payable—OASDI…………………………

 

FICA Taxes Payable—HI………………………………..

 

Employees FIT Payable…………………………………..

 

Employees SIT Payable………………………………….

 

Cash……………………………………………………………….

 

 

 

Payroll Taxes………………………………………………………..

 

FICA Taxes Payable—OASDI…………………………

 

FICA Taxes Payable—HI………………………………..

 

FUTA Taxes Payable………………………………………

 

SUTA Taxes Payable………………………………………

 

 

 

b.  Assume that the employees of Vulcra, Inc. must also pay state contributions (disability insurance) of 1% on the taxable payroll of $62,100 and that the employees’ contribution are to be deducted by the employer.  Journalize the September 12 payment of wages, assuming that the state contributions of the employees are kept in a separate account.

 

 

 

             (b)   Wages…………………………………………………………………..

 

FICA Taxes Payable—OASDI…………………………

 

FICA Taxes Payable—HI………………………………..

 

Employees Disability Contributions Payable….

 

Employees FIT Payable…………………………………..

 

Employees SIT Payable………………………………….

 

Cash……………………………………………………………….

 

Kip Bowman is owner and sole employee of KB Corporation.  He pays himself a salary of $1,500 each week.

 

 

 

Additional tax information includes:

 

FICA tax – OASDI……………………………….. .6.2% on first$113,700

 

Fica Tax – HI    ……………………………………………….. 1.45% total pay

 

Federal income tax…………………………………………….. $232 per pay

 

State income tax …. 22% of the federal income tax withholding

 

Federal unemployment tax ……………………… .6%  on first $7,000

 

State unemployment tax ………………………  .05% on first $14,000

 

 

 

Additional payroll deductions include:

 

401(k) plan       ……………………………………………………… 3% per pay

 

Child support garnishment ……………………………….. $100 per pay

 

Health insurance premium …………………………………. $93 per pay

 

 

 

Record the payroll entry and payroll tax entry for the pay of the week ended June 6 (his year to date pay is $31,500).

 

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6–7A.          Wages…………………………………………………………………

 

FICA Taxes Payable—OASDI………………………….

 

FICA Taxes Payable—HI…………………………………

 

Employees FIT Payable…………………………………..

 

Employees SIT Payable…………………………………..

 

Retirement Plan Contributions Payable……………..

 

Garnishment Payable………………………………………

 

Health Insurance Premiums Payable…………………

 

Cash………………………………………………………………

 

 

 

Payroll Taxes……………………………………………………….

 

FICA Taxes Payable—OASDI………………………….

 

FICA Taxes Payable—HI…………………………………

 

 

 

The following information pertains to the payroll of Texwera Tile Company on June 6:

 

 

 

  1. The total wages earned by employees are $17,210
  2. The state unemployment insurance contribution rate is 3.5%
  3. The entire amount of wages is taxable under FICA FUTA AND SUTA.
  4. The amount withheld from the employees’ wages for federal income taxes is $1890 for state income taxes, $369.40; and for group insurance $193.

     

    Journalize the payment of wages and record the payroll taxes June 6th.

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